Kaunas Office Outlook, 2024 H2 -

Kaunas Office Market Outlook 2024 H2

The Kaunas office market closed 2024 with strong fundamentals but persistent supply shortages, highlighting a city with clear growth potential yet constrained by a limited pipeline. Extremely low vacancy levels, rising rents, and renewed development activity indicate that Kaunas is entering a new phase of expansion ahead of significant 2025 deliveries.

In Kaunas by the end of 2024, total modern office stock reached 277,300 sqm, with only 1,200 sqm added during the year — one of the lowest annual increases to date. Vacancy remained critically low at 3.1%, leaving tenants with very limited choice and reinforcing landlords’ strong negotiating position.

Take-up totalled 15,000 sqm in 2024, with 8,700 sqm leased in H2 as market sentiment improved. Demand remained solid, particularly among small to mid-sized occupiers, but growth was restricted by the lack of larger, modern spaces. Available units were typically below 500 sqm, limiting relocation and expansion possibilities for bigger companies.

Rents continued to climb, bringing Kaunas closer to Vilnius:

• A-class: €15.0–18.0/sqm/month
• B-class: €8.0–15.0/sqm/month

CPI-linked indexation further increased contract rents, occasionally pushing older assets above current asking rates and adding pressure during renegotiations.

Looking ahead, 2025 marks a crucial turning point. Approximately 23,600 sqm of new supply is expected, led by the long-awaited Hermanas building (10,600 sqm). Developers have also restarted planning activity, including Tesonet’s acquisition of a 2.58 ha site with plans for 10,000+ sqm of new office space. Preleasing, however, will remain essential as cautious tenant behaviour continues.

Kaunas ends 2024 as an attractive but undersupplied market moving toward a long-awaited rebalancing. The coming year will finally bring the scale needed to ease vacancy pressure and offer tenants the modern, high-specification space the city has been lacking.